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Will China Jerk the Rug From Under US

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Anonymous

Guest
China Says Major Shift on
Dollar Policy Coming
Financial Intelligence with John Browne

Some very worrisome news came out of China this Saturday — but it got a little more than a blip in the U.S. press.

At a high-level financial conference this past weekend, China’s Premier Wen Jiabao said, “China would actively explore and expand the channels and methods for using [its] foreign exchange reserves.”

Considering that the bulk of China’s reserves are in U.S. dollars, it should send tremors about the future of the greenback.

The dollar has been reeling in recent years. A shift by China out of dollars — as Wen is hinting — could be catastrophic.

China’s reserves recently surpassed Japan’s — now exceeding $1 trillion. Some 70% of these reserves —– more than $700 million — are in dollars.

Interestingly, The Wall Street Journal carried this critical story on page A7 of Monday’s editions with this pleasant spin headline: “China Shift on Reserves Isn’t Likely to Hit Dollar.”

Perhaps I am missing something. China keeps most of its reserves in dollars — and its leader just announced they plan on diversifying their portfolio. This means it won’t affect the dollar?

It is of note that the Financial Times placed its report on the China development smack in the center of Monday page one. Why would U.S. media wish to play down such an important item?

While we believe that in the short-term the dollar may not be hurt — the item should send tremors down the backs of U.S. dollar investors planning to hold the greenback over the long-term.

The Journal reported that Wen’s statement was the “highest-level confirmation yet that China is thinking actively how it can use its reserves, which have increased by more that six times since 2000 and made China one of the worlds largest holders of U.S. Treasury bonds.”

Later the article observed that, ". . . currency traders are hypersensitive to any signs Beijing is losing its appetite for the U.S. currency.”

The FT went on to observe, “This policy switch opens the way for China, which has been largely passive in managing its money to establish an agency akin to Singapore’s government."

As I wrote in my Financial Intelligence email in December and in our sister publication, Financial Intelligence Report, as the U.S. dollar depreciates, China is actively reviewing its holdings of gold.

When China resumes, or even announces its intention to resume, its purchases of gold, expect the price of gold to respond, as we have constantly warned, possibly in a major manner.

Of course, we believe it is not in China’s short-term interests to disrupt the currency markets or the U.S. dollar, of which it holds some $700 billion.

But, in the longer-term, we believe China will use all its strengths, including economic and military to further its path towards super power status.

In this respect, we note last week’s news (given a low profile in our mainstream media) that China had shot down one of its own defunct satellites, 500 miles out into space, at the same height as U.S. military satellites. What sort of message does that send to any observant investor or military strategist throughout the world?

To us it means that China is already on the march to super power status and is our main challenge, even in times of peace.

We urge our readers and investors to pay great heed to the recent announcements and especially actions of the Chinese, even if buried deeply in our news media.

We believe that China’s actions are set to influence such key items as the U.S. dollar (and therefore U.S. interest rates), world commodity prices, gold, and U.S. defense strategy and spending.
 

IL Rancher

Well-known member
There were reports recently that basicaly said the new currency for international reserves will be the Euro if it isn't already.. And I do beleive that we are just about up **** creek without a paddle. when it comes to our international debt.
 
A

Anonymous

Guest
IL Rancher said:
There were reports recently that basicaly said the new currency for international reserves will be the Euro if it isn't already.. And I do beleive that we are just about up s*** creek without a paddle. when it comes to our international debt.

Some conservative economists are predicting the crash of the dollar- devaluation by as much as 30-50%...And that when that occurs is when the globalists and neocons are going to make their move to replace it with the "Amero" and do their consolidation of the North American economies.....
 

IL Rancher

Well-known member
Could be... could be OT.. Amero, for now at least, is "just" the counties of NAFTA right? Of course, that could expand long term I suppose... Wouldn't surprise me in the least to see it in the next 50 years.. Or 15 for that matter.
 
A

Anonymous

Guest
IL Rancher said:
Could be... could be OT.. Amero, for now at least, is "just" the counties of NAFTA right? Of course, that could expand long term I suppose... Wouldn't surprise me in the least to see it in the next 50 years.. Or 15 for that matter.

I think they were predicting the dollar crash, the forming of the North American Union as a redeemer move during the panic, and the "Amero" in the next 3-7 years...

Fifteen years ago I'd have said they were whacko nuts, but the way things have been going the last few years it sure makes you think :shock: ....
 

DaleK

Well-known member
I do know that any livestock producers counting on DDGs from ethanol for cheap feed had better start pushing a bit harder, China's trying to lock up as much as they can ship their way.
 

IL Rancher

Well-known member
Yep.. That is one reason it is getting expensive around here.. A lot of places aren't selling wet at all, they are putting the dry on rail cars and shipping it to ports. Natural gas dropped in price and it made it cheaper for them to dry again. The only hope is that as more places go on line it will start to back off a bit on price... Doubt it though but we shall see..
 
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